Jessica Kim is the founder of BabbaCo, a company that creates simple, functional, super cute baby products. Jessica started her journey as a entrepreneur selling baked goods from her dorm room in college, and today her BabbaCo products are in stores like Buy Buy Baby and Bed Bath & Beyond in more than 20 states.

I invited Jessica here today to share some insight on starting a physical product based business, and the important lessons she learned about branding that made her leave her first business even though it was doing really well.

Transcript

Tim Jahn: So Jessica, you have BabbaCo which is a company that you basically produce baby products, unique, how do I say custom created in a sense. Because you design them, right?

Jessica Kim: Yeah, I design each and every one of our products. So —

Tim Jahn: Okay, so you design them and then you produce them. And then you — I was looking at your buzz press page on your website and you were just all over the Today’s Show, Rachel Ray, all sorts of local newspapers and news stations. But I was also reading — so before we get BabbaCo, I was reading that when you were 19, you had this company called Jessica’s Wonders where you sold baked goods out of your dorm room. Do you want to tell me how all this got started with Jessica’s Wonder’s?

Jessica Kim: Oh my god. So Jessica’s Wonders was — I became an entrepreneur literally by the fluke of an accident. In a sense I wanted to be an anthropologist so growing up when everyone said, “What do you want to be when you grow up?” I just said, “I want to study people.” I didn’t know what that meant but literally when I graduated from college, I thought that I was going to live with tribes in Africa, seriously. But now instead I realize it’s a really great background because if you think about marketing and branding, it’s all about studying peoples behaviors. So that, I feel like I’m an anthropologist and not a business person still to this day.

But there I was in college, I was sophomore, I was 19 years old, I had braces, and I always say that because I think it’s so funny looking back. I started baking out of my dorm room and I started selling to the hotspots at local stores and café’s and I went to Brown University. And it started selling out every store that I sold it to. And I called it Jessica’s Wonders. I literally made my sign out of construction paper and markers. And it just took off, and so I ended up entering the first business plan ever at Brown University and they picked two winners and I was one of the winners. They gave $3,000.00, I was like whoo, it was huge. But more than that, I had access to a lot of the alumni which included so many incredible entrepreneurs. I ended up raising a million dollars my senior year in college from 23 angel investors and we launched quickly right after I graduated.

So after, the day after I graduated, it was like we opened our office, we had outsourced manufacturing, we quickly grew to a little over three million in revenue and the, we had distribution along the whole entire east coast of the US. And so it was an incredible experience. Our whole pitch was like we were the Ben and Jerry’s of baked goods. And my slogan was, “Uh, so good it will make you wonder”. So it, that was like my first experience. It was my first job, it was my first experience as an entrepreneur and that really built the foundation of who I am today.

Tim Jahn: That’s a great slogan. Yeah, I’m thinking —

Jessica Kim: It’s got to be like, “Uh”.

Tim Jahn: You’re a 22 year old college student, you’re a senior at college, 21, 22, 23 and everybody else is probably looking for a job in the real world and your deciding how you’re going to take this baked good business outside the Brown University area and you’re going to raise, did you purposely raise a million dollars or just end up being that amount?

Jessica Kim: You know so right after I won the business plan competition, I were, I was assigned a lot of mentors and really successful entrepreneurs. Like we even had Tom Scott from Tom and Tom you know and Nantucket Nectars on our board and everything. And so we were able, yeah it was incredible. And so we really led with our vision, led with the need. It was a huge branding play.

And so we — I believe in planning so I know a lot of entrepreneurs, some entrepreneurs feel like you know just do as you go. I don’t, for me, I just need to know where I’m going because I’m putting so much into it. So I’m really big on planning, on understanding where we want to be in two, three, five years. What we need to get there. It’s always going to change but I feel like at any given point, you need to know where you’re going.

So because we did that, we realized what kind of funding we needed, what kind of team we needed, what kind of operations in any fashion we needed. And so that’s where the amount of about a million dollars came from. And we were able to raise that money. Now this was in 1998, 1999 so it was a very different economic times than it is today but it was also completely opposite from what was hot at the time. I mean, think about the 1999, 2000, it was all about internet. And here we were, we were kind of a traditional baked goods company, brick and mortar. But I think the way we won, and we were able to attract investment and a great team and sales was because it was about the whole experience.

It wasn’t just about eating a piece of banana bread, it was eating a story. So everything was named after a friend, a family and I think that’s where the anthropologist comes out of me is like you look at the consumer, so what do they want to experience when they eat this? It’s not just about there’s so many choices they can eat. So a lot of times you’re eating kind of just, it’s about a feeling too. And so that’s kind of how we led with Jessica’s Wonder’s. And in a similar way, we’re doing with BabbaCo.

Tim Jahn: So did you end up selling Jessica’s Wonder’s or what happened at the end?

Jessica Kim: So I ran it for five years. We had a team of like 13 people, we had incredible press even then. And it was amazing. And then after five years, there are a lot of lessons I learned from that. And one, as a brand, my number one branding lesson is that your retailer partner is just as much of your brand as whatever you put out, especially if you’re a manufacturer.

So the way we grew quickly was because we partnered with the largest chain of supermarket in the New England area. So in terms of revenue, in terms of growth, that was really great. But in terms of long term branding, we ended up becoming a supermarket brand versus what we wanted to be was our ideal partner was kind of like a Starbucks. You know like a little bit more higher end, more about experiential eating versus the supermarket experience of florescent lights and a $3.99 price point. And so all of those things, you always hear in theory that all of those, the four P’s, the different touch points is what creates your brand. But we experienced it live. And so you know so then we became a supermarket brand and just became something completely different than what our original vision was.

So I ended up, I had this opportunity where I sold my shares to our head investor and then they continued running it and then I actually went off to business school. So I went to Kellogg Business School. You know I think personally to be honest I think I was a little burnt out too. I was, you know I went from 19, you know for five years and I completely just work was my life. Like I didn’t know any kind of balance. You know I didn’t have anyone responsible for me and we could talk about the difference between running a company when you’re just single and then now as a parent with a family, it’s totally different experiences. So getting out at that time was the best decision for me overall.

And I went to business school, I kind of wanted to see like what did I just experience. So I went there. I loved my business school experience for so many different reasons. But I think I was like primed up and ready for that. Met incredible people. Really kind of was able to sit back and kind of analyze what just happened, what we did right, what we did wrong. And then I went to Kraft Foods which you know Kraft Foods are the largest food companies in the US.

And I did that on purpose because I wanted to have an apples to apples comparison of a small start up Food Company and then like a Fortune 500 company. And so that was an incredible experience to see what the backend or was like and the differences between the two. And so, and then after that I had my daughter and I was like three years into Kraft and my world and life completely changed and then as an entrepreneur I saw so much opportunity in this baby industry and parenting industry. So that’s why I started BabbaCo.

Tim Jahn: And what inspired BabbaCo?

Jessica Kim: So first a couple of things. So first when I had my daughter, I had my daughter in a thick of complete freezing cold winter in Chicago. And when they call it the windy city, I know there are reasons why it’s called the windy city. But it was the windy city that February of 2007 I had my daughter, it was freezing. And as you see all the time you see these parents putting blankets over the car seat to keep your baby protected and warm. And I couldn’t find a product that really did that in an easy way, the blanket kept falling off, I didn’t see what my baby was doing. So first, it was the was the typical mompreneur story of creating a product out of need.

And so I created — I didn’t know how to sew. And so I taught myself how to sew on the internet and literally looked up these old school types of tutorials and taught myself how to sew. And that product idea gave me the insight of wow, there’s so many other products I could develop. Like that’s kind of one our strengths is just thinking of an idea, validating it and then bringing it (inaudible). And so it really started off with a need.

But then as a whole, as a brand, I wanted a brand that I felt connected to. When I looked at all the different brands in the baby space, I didn’t feel like I knew who was behind these companies. And so I felt like it would be so great to have a brand that was started by a real mom that could talk about real mom issues, be vulnerable, be real and just kind of a voice for all the parents. And so that’s kind of what (inaudible). You know we’re trying to make parenting just less stressful but more entertaining. So whenever I looked online, I saw kind of resources or blogs or videos.

They were serious, they were like this is how you breastfeed your baby. And really, I just wanted a girlfriend to say, “Girlfriend let me tell me what you need to know when you breastfeed in public.” So it was just kind of that real, down home, feeling like I had a friend out there. You know less than 50% of parents now live with their extended family. So they’re going online as their first resource. So I felt like there’s got to be kind of like that family type of friend on the internet to kind of be something that they connect to. So that’s kind of the gist behind BabbaCo and you know we do it through video and innovative products. So there’s a lot of exciting things in store this year in terms of baby —

Tim Jahn: And BabbaCo, I love what you’ve with BabbaCo because so many of the people that I’ve talked to are often internet entrepreneurs in the sense that they’re creating digital products or digital experiences. Where you’re creating a partial digital experience but you’re selling physical products that I could, you know they’re tangible, I could touch them, I can use them in my physical space. And along with that there’s all sorts of different I think things that you have to think about an entrepreneur. When you had the idea for that, the cover for the car seat, how did you go about figuring out how you were going to produce a physical product? I mean, I wouldn’t even know where to begin.

Jessica Kim: Yeah. Well, in a sense having something tangible can be, it’s actually — you can actually visualize it a lot more too. So what I did was first you got to prototype it. So my advice to everyone is just you literally make it. And don’t be hindered by not having the exact skills to make it. So as I said, I didn’t know how to sew and I taught myself on the internet but it still wasn’t the product that we see today. I just was able to get to the prototype point where I could use it, I could give it to other moms so they can use it, so they can give me feedback, so they could test it and so it was, you know it was good and we were able to make quick changes just based on what we could touch and feel and actually use. And then after that then you look for partners. And partners is huge. And so I just went out, I literally used Google and I searched for manufacturers, sewing manufacturers around the area.

I interviewed so many, did certain samples with so many and then we found a partner who we worked with locally where they just helped us produce like the first 100 up to a couple thousand of our products. So it, so I guess to answer your question, it’s because it’s physical you can kind of glue, sew, you know tape, do whatever it takes just to kind of create it. It doesn’t have to — you don’t need to have like a certain mold yet.

I mean, even if you have a plastic product which we have prototyped already, I literally take apart plastic things that I see in my house and say, if I can take this and that, and I literally break them apart, glue them together and say, yes this is what we need, and you just, that’s all you need to then take it to someone who is an expert whether they’re an industrial designer or you know they’re a manufacturer to understand what you’re trying to get to.

Tim Jahn: Okay. So I mean, in a sense you got to have that mindset where you’re willing to tinker and kind of you know learn how something’s built by taking it apart and kind of just messing around with it in a sense?

Jessica Kim: Yeah. Just kind of messing around with it. And again, I feel like I’m the innovator behind the products. So if you have an idea but you don’t really have that skill of creating the actual product itself, there are, I mean, you just partner with someone. So I think the biggest thing is having, focusing on the customer need first. What is the need, what would address that need? And whether it’s you or someone that you hire or someone that you partner with, you can work together to kind of design that. But if it doesn’t start with a customer need, then you have no product, no solution.

Tim Jahn: Absolutely. And as I mentioned I was looking at your Buzz press page on your website and Rachel Ray, Today’s Show, all sorts of people across the industry high and low, left and right are talking about your products. How did you get form creating that car seat cover to there? What happened? Did this catch on like wildfire or were you out there knocking down doors to get moms to try this out? How did this happen?

Jessica Kim: I mean, at first when we were a no name type of company, we did every trade show that we could think of. We did, we went to mom groups, we first started out with our group of friends because that’s like the first group that I can, can share your products. And we just had them test our products, look at our products. The other thing is we made sure that it was Buzz worthy. So you know I had a lot of different products to choose from to launch with.

And for example, one was something that has to do with baby food making. And then when I thought about it, I was like but that’s done in the home, you don’t really see it. So is that the best product to launch with when we want to use word of mouth and to spread word of mouth? We said no, because people aren’t usually in your home while you’re making food all the time.

So when we looked at our different sets of different products to launch, I said, “This cover is something that is going to be out there, people are going to see it, people are going to see our logo.” And then we made the design super cute as we say where you look at it and you say, “That is the cutest thing I’ve ever seen, where did you get it?” And honestly that’s 50% of our online sales is from referrals and these product cards that we give with each product is from that. Fifty percent of our sales are just from word of mouth and it’s because we picked a design that’s a little buzz worthy. And that works with press too.

So for the first two years, we didn’t have a PR person or a PR firm, we did it all ourselves. And what we did was just take an authentic approach of saying how we started, what was (inaudible), and then we sent them a sample of our products and gave them, showed them pictures. And again, because it was buzz worthy and visually appealing, a lot of the press wanted to cover it. So it was somewhat strategic, but it was also a passion of ours to launch with that certain product.

Tim Jahn: Yeah, and in a sense you kind of, you looked ahead and said, “All right, we’re going to plant these seeds and hopefully they’ll grow some buzz.” I mean, you kind of — like you said it was particularly strategic but then you, some of that was out of your control in terms of how it was going to grow.

Jessica Kim: Yeah. And you know I think it was a lot bigger of an impact or word of mouth spreading that we, than we really anticipated actually. When I first designed the car version of our Babba Cover, at first I thought, “Is this too cheesy? Are people going to like it? I’m not sure.” So we actually focused a lot more on our beautiful designs and aesthetics. But I think people loved just that it was different. And so being different is always a good thing in a crowded space.

Tim Jahn: You mentioned that for the first two years, you were kind of doing, or kind of handling the PR aspect on your own. I assume then now that you have a dedicated firm that handles that for you or you have somebody?

Jessica Kim: Well, so we just hired someone who does it, she’s a single person. Her name is Terryn, she’s awesome. And so we just hired her starting November. And so what she does is like, you know she helps us — she — there’s a lot of work that goes behind getting PR and press and building those relationships. And so she handles all of that for us which has been great. But I still do a lot of the emails and connections. Like I don’t ever — it’s such a big part of our company in how we get the word out.

So I don’t ever just hand that off completely. I feel like who better to sell this product and talk about this product and present this product than the person who’s behind the design and like the founder. And so I have a lot of passion for it. But she definitely takes a lot off of our plate. But there’s a lot of things that people can do. So the first two years we didn’t have a firm or anyone to hire. And I thought the biggest things with PR is that you need the insider connections. But in today’s world, and this is why I’m a huge fan of social media as I know you are too.

You can get connected and tweet directly to editors and writers and people and it’s really about building genuine relationships and oh by the way, they write for this biggest you know parenting magazine. But if you are out there connecting and just being yourself and building these relationships, you have access to a lot of these press opportunities. So and there’s also HARO that we used a lot which is Help a reporter out. Are you familiar with that one?

Tim Jahn: Yeah, I am.

Jessica Kim: Yeah.

Tim Jahn: Peter (inaudible) awesome site.

Jessica Kim: Yeah, that’s how we got a lot of our first press is we used HARO, we wrote directly to the postings. We — trade shows really helped us a lot. So when we were there presenting our products there’s a lot of press wanted to see what the next big thing is. So every single person that comes by your trade booth, I don’t care who they are or what position they are, you are selling your vision and getting them part of your brand. So there’s a lot of ways that you can get the word out and get access to PR versus just having a PR firm.

Tim Jahn: That’s great advice. My last question for you is, what would be your one piece of advice for a creative entrepreneur who wants to go the physical product route? They want to, you know they found a need and they want to create something but it’s a physical product, it’s not a digital internet company. What’s your one piece of advice for them?

Jessica Kim: I think my biggest advice is just to create it. To actually just get it done and as I said before, just create it even though you feel like you don’t have those skills. If you have a physical product, and I think with any kind of company but specifically physically, people want to feel it and touch it if they want to use it. So you can’t sell anything if it’s a physical product if you don’t actually have it physically in front of you. And so I think the first step is just to prototype it. Even if you feel like you can’t, just do it.

And then after that, test it and test it and test it and give it out to as many people as you can. And I think that’s the difference between kind of having a beta site and having a physical product. And the good thing is, we had produced maybe, I hand sewed maybe just ten to 12 units and I got my first wholesale customer that way. So of course, so you can get started with very, very little if you have a physical product. They don’t know how many products you have in inventory; they don’t know how big your company is. So we got our first wholesale customer on ten hand sewn products and now look at where we are. So now we’re in Bye Bye Baby, and diapers.com, and Amazon.com. But the biggest thing with any company is to get started and it’s almost easier with a physical product.

Love the story! i was hoping to hear about the Babbabox in this one, since we have Launched the Lovendar Box http://www.facebook.com/lovendar -a monthly subscription home delivered kit for couples to rekindle love and romance. And learning from Jessica’s experience with launching the subscription service would be priceless.

The approach we take is all about making the physical product, giving it to people and asking for feedback. People are far quicker to advocate for you if they are part of the process. And the feedback shows – people want value. People want to get a lot of value. So its ok to break even or loss money at first as you figuring out which version of your product provides real value!

I especially agree with Jessica’s comment on building the user experience and the branding from day 1 and seeing it through 5 years down the road, showing how it will help people change life for the better and create memorable moments. There is so much to learn as we build the brand and how it impact people’s lives. I cant wait to see the end result of happier couples, more fulfilled families and kids with amazing role models being their parents.

Tim, I’d love to meet Jessica in person to learn directly from her, but in the meantime, it would be great to hear an interview about challenges, successes and mistakes about building the BabbacoBox – a subscription service.

Thanks much for helping us learn so much! Great questions!

http://www.EntrepreneursUnpluggd.com Tim Jahn

Thanks for the comment Lillian! I’m glad you enjoyed the interview. I love the idea of a follow up interview with Jessica about BabbaBox, working on making that happen. Stay tuned!